# EU Banking Watchdog Proposes Crypto Lending Regulations Under MiCA EBA recommends extending MiCA framework to cover crypto borrowing and lending activities. - **Source:** [Cointelegraph.com News](https://brifing.si/source/2e81e982-0137-4db0-8ac2-351f37085775) - **Published:** 2026-09-24 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/6ea4b896-8dc2-46bd-8711-434bb11a7db0 ## Regulatory Expansion Proposal The European Banking Authority (EBA) has proposed extending the Markets in Crypto-Assets (MiCA) framework to include crypto lending activities. This would mark a significant expansion of EU regulatory oversight into decentralized finance (DeFi) operations. The recommendation comes as part of the European Commission's review of MiCA, which currently doesn't specifically cover borrowing and lending in the crypto space. The EBA suggests this move would address growing activities across at least 16 EU member states. ## DeFi Access Regulation The EBA specifically targets crypto firms that provide clients access to DeFi lending protocols, recommending they face additional regulatory requirements. This reflects concerns about the blurring boundaries between centralized and decentralized finance, particularly as AI tools make DeFi access easier. The watchdog suggests these intermediaries could be required to implement suitability tests for users, leverage limits, and enhanced disclosure requirements when facilitating access to DeFi platforms. ## Potential Compliance Measures Among the proposed measures are specific compliance requirements for crypto lending services, including possible leverage limits and additional disclosure obligations. The EBA also raised the possibility of restricting access to lending involving asset-referenced or e-money tokens that require MiCA authorization. These measures would represent a significant new compliance burden for crypto service providers operating in the EU market. ## Certification for DeFi Protocols The EBA proposed introducing a certification regime for DeFi lending protocols, which would represent a novel approach to regulating decentralized platforms. This suggestion acknowledges the unique challenges of regulating truly decentralized systems while attempting to maintain financial stability. The certification would likely focus on protocols that interface with regulated crypto asset service providers. ## Cost-Benefit Analysis Recommended Before implementing these changes, the EBA advised the European Commission to conduct a thorough cost-benefit analysis of extending MiCA to cover crypto lending. This analysis would evaluate the potential impact on innovation versus the benefits of increased consumer protection and financial stability. The recommendation shows regulatory caution about potentially stifling the developing crypto lending market. ## Growing Crypto Lending Activities The EBA cited research showing crypto borrowing and lending activities have expanded across at least 16 EU member states, justifying the need for regulatory oversight. This growth has been particularly notable through platforms that provide easier access to DeFi protocols. The regulator expressed concern that without proper oversight, these activities could pose risks to consumers and financial stability. ## Broader MiCA Review Context The crypto lending recommendations form part of the EBA's broader input into the European Commission's review of MiCA, which also covers stablecoin rules, crypto-asset classification, and reporting requirements. This comprehensive review suggests regulators are taking a holistic approach to crypto regulation, rather than addressing issues piecemeal. The lending proposals specifically aim to close what regulators see as a significant gap in the current framework. ## Regulatory Balancing Act The EBA's proposals represent an attempt to balance innovation in the crypto space with necessary consumer protections. By focusing on intermediaries that provide access to DeFi rather than trying to regulate decentralized protocols directly, the approach acknowledges the practical challenges of DeFi regulation. However, the suggested certification regime for protocols indicates regulators may eventually seek more direct oversight of decentralized systems. ## Sources covering this story - https://cointelegraph.com/news/eu-eba-crypto-lending-defi-mica-rules?utm_source=rss_feed&utm_medium=rss&utm_campaign=rss_partner_inbound — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._